JEC loses school building, accused of smoke screens

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The S.F.-based Jewish Educational Center's bankruptcy trustee this week accused the charity's fallen founders and their supporters of using "smoke screens" to set up a JEC alter ego.

Those maneuvers, he said, may be concealing the involvement of JEC founders Rabbi Bentzion and Mattie Pil in the surrogate charity called the Schneerson Russian Jewish Center, which wants to take over the JEC's day school, programs and once-profitable auctions of donated used-cars.

"I want the board of directors and personnel [of the Schneerson center] to be fully disclosed to the bankruptcy court before any operations under my supervision are transferred to anyone," trustee Stuart M. Kaplan said Wednesday.

The Pils, who started JEC more than a decade ago, were accused this summer of diverting JEC's assets for their personal use. A court order prohibits them from involvement in JEC, which once brought in millions of dollars with its auctions of donated used-cars.

Meanwhile, the possibility of JEC's Schneerson Hebrew Day School opening for the fall term appeared to be close to nil.

"It's really a long shot," JEC's unpaid program director Frank Malifrando said.

As of Wednesday morning, the beleaguered school had no paid staff, no money and no site — though about 70 children were still signed up for classes or day care.

School has been scheduled to start Monday, Sept. 15, although some supporters are apparently pushing for at least day care or preschool to begin Wednesday, Sept. 3.

A roller-coaster of rhetoric started Thursday of last week when JEC board chair Carol Ruth Silver announced that a previously inactive nonprofit called the Schneerson Russian Jewish Center would take over the day school and other programs from the bankrupt JEC. Silver is also the new board chair of the Schneerson center.

She also declared that used-car sales would start again in September, even acknowledging that Bentzion Pil might help.

And Silver forecast that JEC's Schneerson Hebrew Day School would somehow hold onto its rented building at 34th Avenue and Balboa Street.

But Monday afternoon, a federal bankruptcy court judge approved a settlement between the bankruptcy trustee and the landlord that forces the charity out of the building by Wednesday, Sept. 10.

Judge Dennis Montali OKd the settlement despite Silver's prediction that if JEC loses its building and the programs are disrupted, "we may never get them back."

After the court hearing, Silver wouldn't comment on whether her group had any contingency plans.

Perhaps more damaging to Silver's cause, Kaplan said that he hadn't yet agreed to hand over any of JEC's charitable programs to the Schneerson Russian Jewish Center.

That center was founded in 1996 by Mattie Pil and until recently had the same board of directors as the JEC.

Silver announced last week that Schneerson Russian Jewish Center had a "totally different" board of directors from JEC — except for herself.

Svetlana Soukhinina is one of the new board members.

Soukhinina, who prays with Bentzion Pil's congregation, the Schneerson Synagogue/Russian Jewish Center, said she has no prior involvement with the JEC. But "sometimes you just have to help someone in trouble," said the San Francisco resident who emigrated from Riga, Latvia, five years ago.

Kaplan, however, wasn't convinced of the board's independence.

"It may have directors as a smoke screen for the rabbi," he said.

Silver, in fact, acknowledged last week that the Pils would help the Schneerson center as volunteers — and possibly as employees someday.

"There is always going to be a relationship with Rabbi Pil — as a rabbi," Silver said. "You can't get away from the fact they started this school."

In the meantime, Mattie Pil has been volunteering with JEC since she and her husband were removed from the payroll in June.

Silver also told the San Francisco Examiner that the rabbi had decided "to go into private business as a car recycling consultant" and that "we will contract with him as appropriate."

But when asked to confirm her statement, Silver would only tell the Bulletin on Monday that "I don't remember — that doesn't mean it didn't happen."

Malifrando, who is an interim board member of Schneerson center, had a differing view. Wednesday, he asserted that the nonprofit would have to bite the bullet.

"We cannot have the Pils making decisions," he said.

The current upheaval became public in June, when the California attorney general and the San Francisco district attorney officially accused the Pils of fraud, false advertising, tax evasion and diversion of charitable assets for personal use. Former JEC board members are also accused.

The state government's case against the Pils alleged they diverted at least $100,000 to help buy their home and $40,000 to pay for their son's bar mitzvah.

The U.S. Attorney's Office and the Internal Revenue Service are also investigating the charity.

A state-court injunction against the Pils precludes them from raising money for JEC or "any other nonprofit public benefit corporation." But because Schneerson Russian Jewish Center is classified as a "religious" nonprofit, it's possible that the Pils could work for it.

"There is nothing I can do," said Belinda Johns, a deputy state attorney general in charge of the case against the JEC and the Pils.

Instead of working with the Schneerson center, Kaplan is considering a plan to rebuild the floundering charity alone — with court-approved officials and financing.

JEC "can be purified…unfettered by the past," Kaplan asserted.

Yet Kaplan may work with the Schneerson center simply because he wants to save JEC's charitable programs, such as the day school, food program, language classes, computer training and chess club. Most of them were "valid, meaningful and useful to the community at large and to the participants," he said.

"It's a dreadful shame to see that fall apart," said Kaplan, who was the first president of San Francisco's Brandeis Hillel Day School.

Ideally, he would save the programs with a minimum of complications. To do that, he needs at least one member of the Bay Area's Jewish community — perhaps a Russian emigre who has become financially successful — to step forward and help with a $100,000 donation.

He also wants the Jewish community to stop its "knee-jerk reaction" against JEC's muddied past.

If the mainstream Jewish community only can focus on the past players, he said, they will miss out an opportunity to help fellow Jews.

In a related matter, Kaplan is in a dispute with the Schneerson Russian Jewish Center over a large building at 11th Avenue and Clement Street.

JEC, which used its charitable income to purchase the building last year, gave it to the Schneerson Russian Jewish Center as a gift in January.

"I believe it was a fraudulent transfer. I will go after it," Kaplan said.

Johns supports Kaplan's conclusion.

"It was a diversion of assets," she said.

Earlier this summer, JEC attorneys promised in open court to deed the building back to JEC. But Silver said Monday that a new attorney advised the Schneerson center to fight to keep it.

The sale of that building for $875,000 is now pending. Once the building is sold, the proceeds will sit in a trust account until the battle for ownership is fought in court.

Meanwhile, the dispute over the building at 34th Avenue and Balboa Street came to a conclusion this week.

The landlord, the French-sponsored Lycee Francais, has been trying to oust the JEC school since its lease ran out in June.

Last year, the JEC signed a 10-month lease with an option to purchase the building for $2.05 million by June 15, 1997. But JEC never came up with the cash.

According to the settlement, JEC must leave the building by Sept. 10 and give up any claims against Lycee Francais. The French-sponsored school also must give up claims and allow its bill for $46,000 in back rent to fall from a priority status to a lower one.

Lost but not entirely forgotten in the upheaval are the families who expected to enroll their children in a Jewish day school this fall. Last year, about 140 children were enrolled.

Leon Atlas, whose daughter attends the school, reminded the judge that he would be hurting children.

"The human cost will be enormous. The children will be out on the street," he said. "The school will simply disintegrate."

Montali called that scenario "regrettable" but said he had little choice except to approve the settlement.

Jean-Yves Lendormy, a Lycee Francais board member and an attorney, said he believed "substantial justice" had been done but was suspicious of Silver and her supporters.

"I hope they'll abide by the court's order."